US boosts student loan auto-pay discount to 1 point for 2 years
What's new: Borrowers have until Sept. 30 to enroll, and the temporary cut runs from July 1, 2026, through June 30, 2028.
The U.S. Department of Education will raise the interest-rate discount for federal student loan borrowers who use automatic payments to 1 percentage point for two years, starting July 1. The benefit is up from the long-standing 0.25-point reduction and will apply automatically to borrowers already enrolled in auto pay. New enrollees have until Sept. 30 to qualify. The department said participation in auto pay fell to 40% by late 2025 from about 83% in 2019 after the COVID-era repayment pause. Federal student debt now exceeds $1.6 trillion, spread across more than 42 million borrowers. The change arrives ahead of broader student loan repayment changes set to begin this summer.